Report: WGA distributed $104 million in levies

The Writers Guild of America has collected nearly $130 million in foreign levies from 19 countries over the past two decades and distributed $104 million of those funds, according to a recently completed report by the KPMG consulting firm.

The report, spurred by the long-running legal challenge to the guild’s handling of such funds, was posted this week on the WGA West web site.

Variety reported on Jan. 10 that attorneys for the WGA disclosed the $104 million figure during a status conference that day in Los Angeles Superior Court over the 2010 settlement of a class-action suit by William Richert (“Winter Kills”).

The five-page KPMG report contains previously undisclosed details:

•The funds collected date back to 1992, when $1.28 million was collected from France and Germany.

•The largest amount of funds collected was in 2008, with $19.76 million.

•Investment interest collected from the funds over the two decades totaled $8.95 million; $7.65 million of that has been transferred to the WGA West general fund to offset the costs of administering the program.

•Administrative fees, which amount to 5% of what’s been transmitted to the writers since 2004, amounted to nearly $5 million.

•The top year for funds distributed to writers was for the most recent fiscal year ended March 31, 2011, with $21.04 million.

•The WGA West had $21.62 million in “funds held in balance” as of last March 31.

A Q&A about the report, also posted on the WGA website, noted that 85% of the $104 million in distributed funds went to films and TV projects covered by WGA contracts. The remainder of funds distributed were for “non-covered” works including news, sports, adult films and non-WGA animation.

“The report confirms the success of the program, which has distributed $104 million to writers over 20 years,” the guild said in a Jan. 10 statement. “If it wasn’t for the efforts of the WGA West, this money would have remained in the hands of the foreign collection societies.”

Richert’s 2005 suit alleged that the WGA had not properly handled foreign funds due scribes as compensation for telecasts and other exhibition of writers’ works. The settlement required the WGA to pursue “best efforts” to pay all foreign funds within three years and issue a report by a Big Four accounting firm to review the foreign levies from their inception in the early 1990s.

The settlement, signed in 2010 by Judge Carl West, also required an annual review of the foreign levies program as part of its official annual report to members. Richert attorney Neville Johnson raised concerns during the January hearing that the annual report would fall short on details, adding that the foreign levies programs operated by the guilds had been kept under wraps for 15 years.

WGA West general counsel Anthony Segall said in response that the annual report will contain a significant level of detail about the program, equivalent to the KPMG report.

The WGA West disclosed in its last annual report in July that it was holding $25.4 million “due to members” but did not break out how much of that figure comes from foreign levies. The levies for U.S. creatives began to flow after the U.S. agreement in 1989 to terms of the Berne Convention, which establishes the right of authorship for individuals who create works of art. The levies are handled by collecting societies.

West has also supervised settlements of class-action foreign levies suits that were filed against the Screen Actors Guild by Ken Osmond and the Directors Guild of America by William Webb. West recently left his judicial post, leaving supervision of the cases to Judge Kenneth Freeman.

Screenwriter Eric Hughes, who’s served as a consultant to the plaintiffs, criticized KMPG’s review and said it’s not an audit.

“A review will not uncover fraud or other improper financial activity,” he said.

“KPMG used the data and information furnished by the WGAW without any independent investigation or verification.

The WGAW still has not produced a shred of evidence in this case and this is not the accounting that the court had promised the objectors.”